The Winning In The Crash In 2019
Don't ignore a stock market crash in 2019 yet. What we see in December 2018 may be a preview for those who are in the future.
Since the beginning of 2019, we have seen some buyers come, and many have coming up with a “buy the dip” mentality. What's more, the main stock buyers once again say “buy everything” once again.
Can't be stresfull enough: don't worry too much.
Let's start by asking a question: Why are we getting the stock market crash or the bull market?
Earning is one of the most critical factors in emerging or decreasing markets. If the winnings are bad and are expected to worsen, there is a stock market crash. On the contrary, if gains are good and expected to recover, you will get a recovery.
At present, the gains are starting to look weak. In the fourth quarter of 2018, we're still in the middle of the season and things seem to be getting worse.
As of January 25, only 22% of the S & P 500 companies reported earnings for the fourth quarter of 2018. So far, the rate of increase in earnings is around 10.9%. At the end of 2018, analysts and strategists predicted 22.2% growth. (Source: 25 Earning Insight, ”FactSet Research Systems Inc., January 25, 2019.)
Here's something to you: we're also more negative gain guidance. So far, in the first quarter of 2019, 15 companies provided negative guidance, while only one company provided positive guidance. That's scary.
So what do the analysts predict?
Well, for the first quarter of 2019, analysts expect S & P 500 companies to report a gain gain of 0.7%. For the second quarter, earnings growth is expected to be 2.4%. The growth rate was 3.1% for the third quarter and 11.1% for the fourth quarter.
For the full year of 2019, analysts expect a gain of 6.3%
Assuming an increase of 10.9% in each quarter of 2018 in the fourth quarter of 2018, the S & P 500 gain increased by double-digit figures. Moreover, the predictions we see for 2019 can be very optimistic and may be too early, which means they can be lowered.
Don't ignore the Global Economy
There are risks that can damage earnings.
One of the largest is the global economy. The global economic health deteriorates. Even the Federal Reserve began to believe that this could happen.
Keep in mind that S & P 500 companies earn a lot of revenue from outside the United States. In 2017, 43.6% of the revenues of S & P 500 companies were obtained internationally. (Source: da S & P 500 Global Sales,, S & P Dow Jones Indexes, last January 31, 2019.)
If the global economy slows down, S & P 500 companies can be affected by $ 1.00 in sales of $ 1.00 each, which could damage their earnings.
Considering how earnings look and where they can go, I can't get much on the stock market. We can see that the indices are slightly higher in the short term, but the long-term outlook seems bleak at best.
I'm done with what I said before: don't worry too much. More sales may be at the forefront in 2019.